Technology Key to Small Biz Success: Study

Technology will be even more critical to the success of small businesses in 10 years, according to a study sponsored by business and financial management software provider Intuit. The second installment of the "Intuit Future of Small Business Report," authored by the Institute for the Future, a Palo Alto, Calif.-based think tank, focused on how technology will propel and transform small businesses by identifying three trends: small business management will increasingly be "on my time" and "on my terms" for owners; the evolution of the Web will fuel small-business formation, operations and innovation; and the small-business marketing approach will shift from "push" to "pull," with emphasis on providing customers and prospects with the information they need, when they need it. The first installment, released in January, explored the changing face of entrepreneurship, the rise of personal businesses and the emergence of entrepreneurship education. Small businesses are defined by Intuit as those with fewer than 500 employees, according to Steven Aldrich, vice president of strategy and innovation for Intuit's small business division. "There were a few surprises in terms of how fast these technology changes are impacting small business," Aldrich said. "First the rapid lowering of cost in technology, in general, and the ease of use that increasing in that technology is spurring lots of adoption, much more quickly than we had seen in the past. The second one [is] the rapid change of consumers' use of the Internet is confusing small businesses to an extent that I had not expected. They are not sure how to keep up with the way their customers are using the Internet." Being digitally connected will allow small business owners to run their firms on their own terms, and, according to the report, intelligent devices -- equipped with computing, storage and sensing abilities -- will be used more to improve the delivery of goods and services, while freeing business owners from mundane tasks. More business owners will use mobile devices and an emergence of analytic tools will increase productivity and ease management burdens, the report predicted. The high cost and complexity of technology will decrease, leading to an expansion of new business applications. The report found that small business relationships will become more virtual, and social networking will become commonplace, allowing business owners to connect with customers, partners and suppliers globally. The report also stresses that a small business' online presence is the most important factor in gaining new customers. In the last five years, according to Aldrich, consumers' use of searching the Yellow Pages for goods and services has decreased by 50 percent; instead, they are going online first to conduct research. The third installment, to be released later this year, will examine how small businesses will affect society and the economy through 2017.